UK’s Hammond sees more spending, tax cuts if Brexit deal done: FT

LONDON (Reuters) – British finance minister Philip Hammond said he would be able to free up billions of pounds in extra public spending or tax cuts if the country can resolve its Brexit impasse, the Financial Times said on Friday.

Hammond is due to announce a half-yearly update on the budget on Wednesday, a day after parliament votes on Prime Minister Theresa May’s plan for a Brexit divorce deal with the rest of the European Union.

Hammond told the FT that the new official fiscal forecasts would show that the public finances were in better shape than in his last budget statement and he would have more than the 15.4 billion pounds of fiscal “headroom” he has previously earmarked for potential spending.

He said around 100 or so euro-skeptic Conservative Party lawmakers should back May’s deal regardless of whether she secures further concessions from the EU in negotiations which are expected to continue this weekend.

Britain is scheduled to leave the EU on March 29. May has opened up the possibility of a short delay, possibly until June, if her plan is rejected next week by parliament which threw out a version of it in January.

When Hammond announced his most recent full annual budget plan in October, he also held out the prospect of higher spending if parliament backed the government’s Brexit plans.

Hammond played down the concerns of Conservative lawmakers that the Northern Irish backstop – a guarantee sought by the EU to avoid the reintroduction of a hard border with Ireland – could leave Britain permanently trapped in Brussels’ orbit.

“There is nobody in the EU I’ve ever come across who thinks the UK could be held in perpetuity in an arrangement that was detrimental to its interests against its will,” Hammond said. “Who is going to enforce such an arrangement on this?”

Earlier on Friday, May urged the EU to make “just one more push” to break the Brexit deadlock but proposals from the bloc’s chief negotiator fell short of anything that would win over the British parliament.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.